Wealthy homes drag housing prices
Moderately priced homes in Fairfield County are seeing huge spikes in terms of prices and number of homes sold, according to a new report.
While the average price of a home sold in New Fairfield increased 66 percent in July compared to last year, the average price of a home sold in Old Greenwich, one of the wealthiest neighborhoods in the state, decreased by nearly 40 percent, according to data released by real estate company William Raveis.
“The higher-end pricing is not seeing a comeback as well as the moderately priced homes,” said William Raveis, principal of the largest family-owned real estate company in the Northeast. “Average prices are starting to increase for moderately priced homes, but the high end isn”™t doing as well.”
Compared with the national real estate recovery, Connecticut is still lagging, especially when it comes to the average price of single-family homes sold. In July the state saw just a 2.8 percent increase, according to Raveis data. However, the market has stabilized, Raveis said. It”™s just a fight between individual communities. Broken down further, it”™s a fight where the ultra-rich actually seem to be losing, for now.
Fewer than one-third of the towns in Fairfield County saw a price decrease in July. But the towns that did had the highest prices to begin with. In Greenwich, where the average cost of a single-family home was $2.5 million in July, prices were still 9 percent lower than last year. In Rowayton, a wealthy Norwalk neighborhood, prices dipped 18 percent to $1.2 million. Overall the county saw a 3.1 percent decrease in the average sales price of a single-family home. Unit sales however increased 35 percent.
In contrast, great strides were made in smaller communities like New Fairfield, Danbury, Ridgefield, Trumbull and Fairfield where each town saw price increases above 8 percent.
In those communities, there”™s been a lot of underpriced inventory that”™s finally burned off, Raveis said. Meaning homes are now being priced more aggressively, since fewer are on the market. For instance, the average price of a home sold in Danbury increased 19 percent last month to $315,000, year to year. The number of homes sold in Danbury also increased 27 percent compared with July 2012.
By the end of 2014, Raveis said he predicts housing prices will have fully recovered the 25 percent drop from the housing crash.
“It”™ll take us nearly seven years to make it back,” Raveis said. “But it will level out after that, unless Fairfield County can generate more demand in terms of the supply of people.”
Without more people employed in the state, Raveis said he doesn”™t think prices will increase beyond a full recovery. Without more corporations moving into the state to fill the high-end homes, the average price likely won”™t increase beyond the stabilized level.